When a person moves to a new state, [the Tax Foundation notes], their income is added to the total of all other incomes in that state. This positively affects the total taxable income in his or her new state, and negatively affects the income in the state he or she left.

In this light, constituents are customers, seeking a better deal and withholding their tax dollars where they can. These revealed preferences also tell us more than what voting can, because there is skin in the game. With migration, people face substantial trade-offs, both in terms of transactions costs and immediate policy changes. The same cannot be said for voting (a stated preference).

As I noted in an earlier Fiscal Insight newsletter on the topic of geographical arbitrage and competitive governance, there is a test on the horizon for how much freedom will bring prosperity and attract immigrants and investment. These “Startup Cities” — new jurisdictions with freedom for innovation — remain a key topic of interest here at the PanAmerican Post, and we’ll have more on those very soon.

Get free promotions for your business!

For a limited time we are giving away a week of unlimited free promotions for your organization. Our new LiveMarket Special Offers, Dining Deals, & Events reach over 30,000 local readers. Click below to get started.